Friday, May 17th, new legislation was introduced in the House that would make important changes to the Historic Tax Credit. The bipartisan Historic Tax Credit growth and Opportunity Act (HTC-GO) closely resembles a combination of the Historic Tax Credit Improvement Act and the Historic Tax Credit Enhancement Act of the 115th Congress. The legislation would bring more value to historic tax credits and improve access to the credit and investment for smaller rehabilitation projects.
The legislation was introduced in the House of Representatives by Congressmen Earl Blumenauer (D-OR), Darin LaHood (R-PA), Terri Sewell (D-AL) and Mike Kelly (R-PA). Senate introduction of similar legislation is expected within the next few weeks.
HTC-GO brings more value to HTC transactions and encourages redevelopment of smaller, income-producing properties by:
- Eliminating the HTC Basis Adjustment requirement. Presently, the tax code requires that all building owners subtract the amount of HTCs from a building’s basis (the amount a property is worth for tax purposes). In short, the federal government is giving an incentive and then taxing that incentive. Eliminating this requirement will bring more value to all HTC projects by increasing the basis of rehabilitated historic buildings for building owners, provide additional depreciation and other tax benefits, and attract more capital from tax credit investors
- Increasing the credit from 20 to 30 percent for projects with rehabilitation expenses of less than $2.5 million
- Encouraging more outside investment for smaller projects (under 2.5 million) by allowing the transfer of the credits as a tax certificate
- Making it easier to meet the substantial rehabilitation test
- Creating greater flexibility for nonprofit organizations to partner with developers in redevelopment projects
Lend Your Support for the Bill
Please contact your House Representative and encourage them to Co-sponsor the Historic Tax Credit Growth and Opportunity Act.
- To locate the name and phone number of your House Representative, click here
- Call the Capitol Switchboard at 202-225-3121 and asked to be connected to your or House Member’s DC office
- Call (during office hours) the offices of your House Members. Ask to speak to tax staff, your staff contacts in offices or ask for email addresses of tax staff
- Ask: Please co-sponsor the Historic Tax Credit Growth and Opportunity Act, sponsored by Blumenauer/ LaHood/in the House
Lobby Congress in DC on Behalf of the HTC on Wednesday, June 19th
The Historic Tax Credit Coalition is welcoming all Historic Tax Credit (HTC) advocates to come DC and join us on Capitol Hill on June 19th. This fall, there will be legislative vehicles that Congress must pass by the end of the year. There is likely opportunity to include tax provisions from the HTC-GO legislation, that have strong support, in the moving legislation. June 19th is the day before many in the HTC industry are in town for the IPED Historic Tax Credit Conference, so we are hoping to have a strong showing of HTC industry advocates, preservationists and main street coordinators on Capitol Hill on June 19th. As always, staff will set up your meetings and provide educational materials including maps and a list of all projects in your state and Congressional District.
To participate in the June 19th Lobby Day: Please reply or email Michael Phillips (email@example.com) if you are available. If you would like to register for the IPED Historic Tax Credit Conference after the lobby day on June 20th and 21st, click here.
National Park Service Releases HTC Annual Report
On March 11, The National Park Service released its anticipated Federal Tax Incentives for Rehabilitating Historic Buildings: Annual Report for Fiscal Year 2018. The report highlights continuing strong demand for federal HTCs and the significance of the credit as the “nation’s most effective program to promote historic preservation and community revitalization through historic rehabilitation.” During over 40 years of the program’s existence, 44,341 projects have been rehabilitated over 2.5 million jobs created (According to FY 2017 NPS Econ Impact Report) and $96.87 billion has been invested in historic rehabilitation. Just in FY2018, 1,013 Part 3 projects were completed, generating over $6.9 billion in private investment. In the past year, there has been a “9% increase in certifications of historical significance (Part 1), and approved rehabilitation projects (Part 2 and Part 3) remain at prior-year highs.” In FY 2018, almost half (46%) of all completed projects (Part 3) were under $250,000 in credits ($1 million in QREs), 18% were under $50,000 in credits ($250,000 in QRE’s) and 74% of all FY2018 projects were under $1 million in credits ($5 million in QREs). Out of the over 587,000 housing units created, 28% were low- and moderate-income housing. For more information click here.